WASHINGTON — Many Minnesotans have been able to afford health care coverage under MNsure after the Biden administration increased Affordable Care Act subsidies. But that financial help is now in danger.
Enhanced subsidies lowered insurance premiums for policies purchased through MNsure for about 90,000 enrollees.
The money to renew those premium credits must be approved by Congress by the end of the year. But that is threatened by the Trump administration’s push to make substantial cuts in federal programs and long-held Republican hostilities to the Affordable Care Act, which set up MNsure and all state health insurance exchanges.
Elimination of the enhanced subsidies would increase the average premium of an individual whose premiums are subsidized by about $2,122 a year, said MNsure CEO Libby Caulum.
“Right now, those credits are making a difference in the lives of many Minnesotans,” she said.
In December, the Congressional Budget Office determined that 2.2 million ACA exchange customers will lose their coverage in 2026 and premiums for others will increase on average by 7.9%.
Yet Caulum said there’s “great concern” that Congress will not extend the enhanced subsidies, which were first implemented in the American Rescue Act in 2021.
The enhanced subsidies were extended the following year by the Inflation Reduction Act, a major accomplishment of former President Joe Biden that President Donald Trump has vowed to undo.
To Caulum, the federal move to lower health insurance premiums helped boost enrollment in the policies offered by MNsure and helped cut the state’s uninsured rate to less than 4%.
MNsure says it serves “individuals and families from all walks of life, including entrepreneurs, farmers, people who are self-employed, gig workers, Minnesotans who don’t have access to health insurance through their employer and early retirees who aren’t yet eligible for Medicare.”
But some MNsure enrollees will feel a greater impact if subsidies are rolled back.
The enhanced subsidies cut the premiums for lower-income enrollees from 2% of their annual income to zero. Meanwhile, higher-income individuals currently pay no more than 8.5% of their income on their insurance premiums. The end of the enhanced subsidies means they will revert to being ineligible for any assistance.
A Kaiser Family Foundation analysis released this week said that, nationally, about 51% of the higher-income enrollees (measured as income that’s four times the federal poverty level, or about $62,600) who would lose assistance are between the ages of 50 and 64, an age group that is faced with the highest health insurance rates.
The Kaiser Family Foundation said, based on 2025 premiums, that a 60-year-old couple earning $85,000 annually (416% of the federal poverty level in the contiguous 48 states) would see their monthly premium payments increase by $1,507 a month, or more than $18,000 a year.
Self-employed individuals would also be hard hit, with about 38% of them losing their ACA subsidy eligibility, the Kaiser study determined
As would about 15% of rural residents who purchase their insurance through an ACA marketplace like MNsure.
“For years, the expanded Affordable Care Act tax credits have significantly lowered premiums and health care costs for Minnesotans,” Sen. Tina Smith said. “If we don’t extend these credits before they expire, millions of people will see their premiums skyrocket, and many will lose their insurance altogether.”
Smith said the nation’s health insurers are already meeting to calculate their insurance rates for next year.
“If Republicans don’t come to the table and work with us on this, insurers will see these credits are expiring and reflect that uncertainty onto consumers,” she said. “People will skip or avoid going to their doctor because they can’t afford it, and their health and wellbeing will suffer. Many Americans don’t even realize we’re on the edge of this health care cliff that will harm them directly.”
MinnesotaCare and Medical Assistance also endangered
The end of increased ACA subsidies could also impact the 100,000 Minnesotans who receive access to medical care through MinnesotaCare, which offers basic health insurance coverage to individuals who earn 133% to 200% of the federal poverty level. The program is largely funded through ACA subsidies.
MinnesotaCare and Medical Assistance, Minnesota’s version of the Medicaid program, are administered by the state’s Department of Human Services.
DHS Deputy Commissioner John Connolly said his agency is “tracking” the fate of the enhanced subsidies, but he “doesn’t assume that the subsidies would be extended.”
There’s another threat to health insurance coverage for low-income Minnesotans. The $880 billion in cuts the U.S. House GOP is seeking from the U.S. Department of Health and Human Services poses a threat to the ACA’s expansion of Medicaid to higher-income families and childless individuals.
Of the more than 1.2 million Minnesotans who are covered through Medical Assistance, an average of 284,000 individuals a month last year were enrolled through the Medicaid expansion program.
The cost of Medicaid is shared between the federal government and states. But the federal government pays for most of the cost of those who are enrolled through the Medicaid expansion program.
Last year, the federal government paid about $3 billion to cover Medicaid expansion patients, while the state paid $325 million. The state would be hard pressed to make up the loss of those federal dollars to keep those low-income individuals insured.
Still, Connolly said that at this point “nothing has changed.”
But he concedes there is a lot of uncertainty and concern over how the Trump administration and the GOP-controlled Congress will impact access to health care for those who are not covered by an employee-based health insurance policy, Medicare, veteran’s benefits or private insurance plans, which are too costly for many Americans.
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